Market Snapshot, 10:00 am CT (VIP) -- August 5, 2013

August 5, 2013 05:06 AM
 

Corn futures are 4 to 7 cents lower with the September contract leading losses.

  • Futures are under pressure as trader attitudes are overwhelmingly bearish.
  • The lack of threatening weather continues as the dominant factor in trader thinking. Rains have swept across southern Minnesota into northern and eastern Iowa this morning and are headed east. Weather forecasts suggest beneficial rain may come to dry areas of the western Corn Belt this week and below-normal temps are expected to continue.
  • Traders are looking ahead to next week's first survey-based crop production estimate from USDA and they are expecting that figure to rise due to the currently non-threatening growing conditions. Meanwhile Informa Economics is expected to release its August crop estimate later this morning.
  • A firmer U.S. dollar index is also added light selling pressure today.
  • Gulf basis is 25 cents weaker for immediate delivery, unchanged for last-half August and September delivery, a penny weaker for October delivery and unchanged for November and December delivery.

 

Soybean futures opened the daytime session under pressure but have since turned narrowly mixed amid light corrective buying.

  • Cool temperatures over the weekend and a wave of showers and thunderstorms across Minnesota and eastern Iowa is limiting the upside to mild short-covering.
  • Weather forecasts calling for cool temperatures and chances for rain are still viewed as positive for plant development, which limits trader buying interest to short-covering only.
  • Traders will start adjusting their yield estimates ahead of USDA's first survey-based crop production estimate due August 12. Informa Economics will reportedly release its estimate later this morning.
  • China plans to auction 500,000 MT of state-owned soybean reserves on Thursday, which is price-negative, but this has been rumored for more than a week and prices are expected to be above those of imported beans.
  • Gulf soybean basis is unchanged in early morning trading.

 

SRW and HRW wheat futures are posting double-digit losses. HRS futures are mostly 5 to 8 cents lower.

  • Negative attitudes in the corn and soybean markets continue to spill over into winter wheat futures. Seasonal trends should be turning favorable for winter wheat but the heavy bearishness in corn and soybean is too much for the mildly positive news developing in wheat.
  • Technical-based selling is weighing on wheat futures as September Chicago futures dropped to a new contract low.
  • Traders continue to view weather forecasts as positive for the spring wheat crop.
  • A firmer U.S. dollar index is adding price pressure to futures today.
  • Gulf SRW basis is unchanged in early morning trading.

 

Live cattle and feeder cattle futures are mildly higher this morning.

  • Live cattle futures are firmer in light trading on reports live cattle traded at $1.20 at week's end in the southern Plains, up $1 from earlier in the week and a week earlier.
  • Traders expect cash cattle prices to move higher seasonally and are looking for the boxed beef market to put in a seasonal low. Trading will remain thin until they see confirmation of firmer wholesale beef prices.
  • A firmer U.S. dollar index is providing some light pressure on futures.
  • Feeder cattle futures are firmer on the mild strength in live cattle and the continuing decline in feed prices.

 

Lean hog futures are slightly to moderately higher this morning, with the October and December contracts leading gains.

  • Traders continue to narrow the discount futures hold to the cash market.
  • Cash hog prices are starting the week steady. Some plants need to fill slaughter needs for the end of the week, which is supporting futures.
  • The firming in wholesale pork prices recently is also seen as supportive.
  • Packer margins are again in the black, which is positive but packers are likely to remain restrained in their bidding as they continue to look for a season increase in hog numbers and a decline in wholesale prices.
     
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